Strategy in a Time of Explosive Change

By Pascal Dennis (bio)

May you live in interesting times – Chinese Curse

Interesting times indeed, no? The reasons are too long to recite here – changing technology, customer expectations, internationalization, rapid cultural shifts, the explosion of information…

Technological change, for example, is so rapid and severe that in many industries we can no longer confidently define value.

The ‘Eight Essential’ technologies – Augmented Reality, Virtual Reality, AI, Blockchain, Robotics, Drones, Internet of Things, and 3-D Printing have exploded the ‘design space’.

Only by developing deep empathy with our customers & their customer journeys can we begin to understand what’s important to them. And even then, value is a moving target.

So it goes…

How to manage one’s business (and one’s life) in such times?

Let’s focus on the most important things first: How do we develop and deploy strategy in ‘interesting’ times?

Quick & ‘Easy’ Strategy

Keep it simple – if you can’t tell the story with one-page, do you understand it?

Accept that when it comes to strategy, perfection is impossible - and not even desirable! Remember, there is no right answer in strategy – only a right process!

Ensure, therefore, that purpose & logic are clear so that when you inevitably ‘pivot’, you’ll know what parts of your hypothesis were sound or not, and why.

Choose!

Strategy is not about deciding what’s important. All the ideas your team proposes are likely ‘important’. But you can’t do them all – you have to choose.

Too often, leaders try to hedge their bets by choosing too much, with predictable results. Choose the critical few, check frequently, and be prepared to pivot.

Please don’t misunderstand the great Henry Mintzberg’s ‘emergent’ strategies concept. Just because you’re prepared to pivot, doesn’t mean you needn’t articulate a hypothesis!

Failing to do so, of course, condemns you to the limbo of endless reaction & limited learning.

Avoid Boring Strategy Docs

The typical corporate strategy comprises a ‘Mission’, ‘Initiatives’, and in effect, a ‘Budget with Prose’. (Tip of the hat to another great, Dr. Roger Martin, for this.)

These are deadly dull and have a soporific effect on your team. ZZZZZZZZZZZZ…..

Keep your strategy to one page, tell your story, and answer the Big Questions as simply and clearly as you can:

1. Who are we and what do we believe in?
2. Where are we going?
3. How do we get there? (What’s our underlying logic?)
4. What’s preventing us?
5. What capabilities do we need to develop?
6. What management systems do we need to develop?

These are difficult questions, of course, which require deep experience and reflection. To develop a good strategy we need to bounce between the worlds of action and thought.

As the saying goes, get out of the building.

And finally, even though we live in times of explosive change, remember that some things are eternal.

Reflection, experience and the intuition gained thereby are innately human, and unlikely to be replaced by technology.

More likely, in my view, technology will enable the strategist, just as a horse enables the rider.

But that’s the topic of another blog.

Here’s to interesting strategic journeys.

Best regards,

Pascal



In case you missed our last few blogs... please feel free to have another look…

The Function of Leaders is to Produce More Leaders
Complexity is a Crude State, Simplicity Marks the End of a Process of Refinement
Can Lean & Agile Help to Fix Our Courts? Part 4
Can Lean & Agile Help to Fix Our Courts? Part 3

Toyota’s New Rivals & ‘ Life and Death Battle’

By Pascal Dennis (bio)

We are in a 'life & death battle' against our new rivals, Akio Toyoda

Mr. Toyoda is not talking about Volkswagen, GM or Audi…he means Google & Waymo, Uber, Lyft and the rest.

Ironic, no? After seven decades of unparalleled (analogue) excellence, the world’s greatest manufacturer is facing a mortal threat from digital companies

After developing & deploying of the legendary Toyota Production System (TPS) in facilities around the world, Toyota is finding it’s not enough.

TPS is necessary to be sure, as Elon Musk and Tesla are finding to their chagrin, but not sufficient. We have to deepen and extend the Toyota business system with digital methods.

A tough challenge for a proud, conservative company that historically has been slow to adopt digital technology.

For example, in the 1990’s at our old TMMC plant in Cambridge Ontario, providing computers to managers and group leaders was a big deal, which generated much soul-searching.

“Will we lose touch with what’s actually happening on the shop floor?”

Grudgingly, our old senseis relented, though they continued to write their A3s in pencil.

And when it came to strategy or problem solving, they taught us to never trust the computer screen, and always to go and see for ourselves. Were they wrong?

Of course not. TPS and the great old senseis who disseminated TPS have changed the world. (They certainly changed me.)

But in an age of explosive technological change, Value – the raison d’etre of TPS – is a much more elusive target than it was in the 1990’s. And we have to change to keep up with it.

It’s no longer enough to build a splendid car – you also have to stuff it with splendid computers, connect to an ecosystem of enablers, and perhaps make it drive (fly?) by itself.

Which means you have to keep innovating forever. In short, continuous improvement is necessary, but not sufficient.

Whenever we need to create something new in conditions of extreme uncertainty, we need a new set of arrows in our quiver: continuous innovation.

Not everywhere, let me hasten to add. Continuous innovation everywhere, a common cliché & conceit these days, is a practical absurdity.

For example, if you’re making kitchen towels in a factory in Utah, extruding plastic auto parts in Michigan, or piloting a container ship up through the Suez Canal to Rotterdam, your focus will be continuously improving.

Safety, Quality, Delivery and all the related metrics (cycle times, OEE, work-in-process, changeover times etc.)

Every organization needs a foundation of standards and stability. The digital tsunami does not obsolesce these core needs – it depends on them.

But if you’re a product/service leader in any of these industries, the entire customer experience is your chessboard, and the Eight Essential Technologies* must inform your moves and thinking.

Wherever we need to create something new in conditions of extreme uncertainty, we need to learn to iterate to value, i.e. innovate continuously.

Imagine team members and leaders at a world class muffler manufacturer who have spent a few decades refining their Single Minute Exchange of Die (SMED) processes!

Sorry, we’ll be making fewer and fewer mufflers from now on…

So it goes when you focus on methods, and not the thinking behind them. SMED is a countermeasure to a specific problem. If SMED all you know, then digital is a big problem.

But if you understand the thinking behind SMED, and TPS as a whole, with hard work & reflection you should be able to apply it to new problems.

Humility is also a great enabler. It’s healthy to accept that what we did in the past is irrelevant to most people. What have you done for us lately, is a severe, but in my view, fair test.

Indeed, it’s the very question facing Akio Toyoda and his splendid organization.

Good luck!

Pascal

Strategy in a Time of Explosive Change

By Pascal Dennis (bio)

May you live in interesting times – Chinese Curse

Interesting times indeed, no? The reasons are too long to recite here – changing technology, customer expectations, internationalization, rapid cultural shifts, the explosion of information…

Technological change, for example, is so rapid and severe that in many industries we can no longer confidently define value.

The ‘Eight Essential’ technologies – Augmented Reality, Virtual Reality, AI, Blockchain, Robotics, Drones, Internet of Things, and 3-D Printing have exploded the ‘design space’.

Only by developing deep empathy with our customers & their customer journeys can we begin to understand what’s important to them. And even then, value is a moving target.

So it goes…

How to manage one’s business (and one’s life) in such times?

Let’s focus on the most important things first: How do we develop and deploy strategy in ‘interesting’ times?

Quick & ‘Easy’ Strategy

Keep it simple – if you can’t tell the story with one-page, do you understand it?

Accept that when it comes to strategy, perfection is impossible - and not even desirable! Remember, there is no right answer in strategy – only a right process!

Ensure, therefore, that purpose & logic are clear so that when you inevitably ‘pivot’, you’ll know what parts of your hypothesis were sound or not, and why.

Choose!

Strategy is not about deciding what’s important. All the ideas your team proposes are likely ‘important’. But you can’t do them all – you have to choose.

Too often, leaders try to hedge their bets by choosing too much, with predictable results. Choose the critical few, check frequently, and be prepared to pivot.

Please don’t misunderstand the great Henry Mintzberg’s ‘emergent’ strategies concept. Just because you’re prepared to pivot, doesn’t mean you needn’t articulate a hypothesis!

Failing to do so, of course, condemns you to the limbo of endless reaction & limited learning.

Avoid Boring Strategy Docs

The typical corporate strategy comprises a ‘Mission’, ‘Initiatives’, and in effect, a ‘Budget with Prose’. (Tip of the hat to another great, Dr. Roger Martin, for this.)

These are deadly dull and have a soporific effect on your team. ZZZZZZZZZZZZ…..

Keep your strategy to one page, tell your story, and answer the Big Questions as simply and clearly as you can:

1. Who are we and what do we believe in?
2. Where are we going?
3. How do we get there? (What’s our underlying logic?)
4. What’s preventing us?
5. What capabilities do we need to develop?
6. What management systems do we need to develop?

These are difficult questions, of course, which require deep experience and reflection. To develop a good strategy we need to bounce between the worlds of action and thought.

As the saying goes, get out of the building.

And finally, even though we live in times of explosive change, remember that some things are eternal.

Reflection, experience and the intuition gained thereby are innately human, and unlikely to be replaced by technology.

More likely, in my view, technology will enable the strategist, just as a horse enables the rider.

But that’s the topic of another blog.

Here’s to interesting strategic journeys.

Best regards,

Pascal